Sina offers `shareholder rights' to block Shanda bid

Sina Corp (新浪), which operates China's most popular Internet search engine, said it has introduced a "shareholder rights" plan to try to rebuff a takeover attempt by Shanda Interactive Entertainment Ltd (盛大互動娛樂).

Under plan, shareholders will have the right to buy US$150 worth of new stock at half the market price for every existing share they own, should Shanda buy an additional 0.5 percent of the company, Sina said yesterday in a statement on its Web site.

Shanda, an online games developer run by Shanghai billionaire Chen Tianqiao (陳天橋), said in a US Securities and Exchange Commission statement last Thursday that it had purchased 19.5 percent of Sina and may seek to buy control of the company.

Shanda gain from linking up with Sina's "portal" Web site, analysts such as Zhang Dongming said.

"Sina obviously sees this as a hostile takeover," Zhang, an analyst at BDA China Ltd, a Beijing-based technology market research company, said in a phone interview.

"Sina doesn't have to sell itself. It has a broad user base and strong branding, stronger than Shanda's," he said.

Both companies are Shanghai-based and listed on the NASDAQ market, regulated under US law.

Meanwhile, Stone Group Holdings Ltd, a Hong Kong-based company that makes electronic and health-care products, said it plans to sell its remaining 2.5 million shares in Sina in the open market because it's seeking a profit from the investment.

At US$29.17 a Sina share, the average price in the six months through last Thursday, the sale of remaining stock would generate gross proceeds of US$73 million, Stone said in a statement to Hong Kong's stock exchange yesterday.

Stone seek shareholders' approval for the sale at a special meeting.

Rather a hostile takeover, Shanda may be more likely to use its position as Sina's biggest shareholder to try to persuade the company's directors and stockholders of the merits of a merger, the Financial Times said, without reporting where it obtained the information.